In consolidation at December 31, 2019, what adjustment is necessary for Hogan's Equipment account?
A) $3,000 increase.
B) $3,000 decrease.
C) $2,700 increase.
D) $2,700 decrease.
E) No adjustment is necessary.

Question

Quizplus · Accepted Answer

In consolidation, the Equipment account needs to be adjusted for any intercompany transactions. Hogan sold equipment to Jackson for $3,000, so Hogan's Equipment account needs to be increased by $3,000. Therefore, the correct answer is A, $3,000 increase.

In Consolidation at December 31, 2019, What Adjustment Is Necessary